The semiconductor market for military and aerospace applications is seen to grow 8% in 2017 and reach $2.9 billion. The increase is because of the better economic conditions in the military segment and the continuing growth in the aerospace industry.

The largest markets for military spending continue to be the United States, Russia and China. All three of these markets increased military spending in 2016 by between 4.5% and 6%. The increase is expected to be even larger for 2017. Long term, Databeans expects the market for semiconductors in military and aerospace applications will continue to grow at a compound annual growth rate of 4% over the next five years.

Spending on semiconductors for application development in the military and aerospace market is segmented into four areas: military, commercial aeronautics, space applications and satellite applications. This year the satellite market is expected to have the strongest growth for semiconductor revenue, growing by an estimated 14%. Commercial aeronautics is expected to expand by 11%, the space market is expected to expand by 7%, while the much larger military market is expected to increase by 6%.

The military market continues to dominate this industry, and with stronger performance from the world’s largest military equipment manufacturers and contractors, demand is expected to by slightly higher than average. These manufacturers include Lockheed Corp., Raytheon Co., Northrop Grumman Corp. and Finmeccanica. Large suppliers of semiconductors into this market are Microsemi, Xilinx, E2V, Texas Instruments and Infineon Technologies.